Kenya's competition authority (CAK) has announced that it intends charging merger filing fees from July 2014.

The CAK, mandated to approve all mergers and takeovers in Kenya, is authorised by Kenyan competition legislation to make rules prescribing merger filing fees. However since its inception, it has reviewed over 150 merger notifications without charging any filing fees.

Mergers that fall below the lower threshold will not attract a filing fee.

In media reports, the Director General Mr Wang'ombe Kariuki has noted that the fees will enhance the CAK's independence from the Treasury, which currently funds the regulator's operations. He has also defended the fees as being in line with global competition policy best practices. Given the quantum he claims the fees are unlikely to deter investment.

It is not unheard of for competition regulators to charge fees in order to cover their merger analysis costs relating to inter alia staff and board member remuneration, office overheads, research and field trips. In comparison with South Africa's current tiered system of R100,000 for intermediate mergers and R350,000 for large mergers, the proposed filing fees do not appear unreasonable.

The CAK has recently published a notice in terms of which it proposes a tiered fee structure based on the combined turnover or assets of merging parties in Kenya, whichever is the higher:

Click here to view table.

Given that Kenya is a Common Market for Eastern and Southern Africa (COMESA) Member State, there is some concern that firms doing business in more than one Member State may, to the extent that national competition authorities retain parallel jurisdiction, face filing fees in both COMESA and the relevant Member State(s). For example, the current indications are that the CAK is advising parties to notify transactions to it as well as the COMESA Competition Commission as Kenya has not yet amended its own national legislation to allow the COMESA merger regime to trump its national requirements. The risks of having to notify and pay filing fees to both regional and national jurisdictions increases the costs and uncertainty of doing business in Africa and, if not adequately resolved, may well deter investment.